Tourism and Hospitality

Marketing
Introduction

Prepared by: CB Joan R. Doyo, MCA, PhD

What is Tourism?

• The first definition of tourism was made by Guyer and Feuler

in 1905 as “a phenomenon unique to modern time which is
dependent on the people's increasing need for a change and
relaxation, the wish of recognizing the beauties of nature and
art and the belief that nature gives happiness to human beings
and which helps nations and communities approach each other
thanks to the developments in commerce and industry and the
communication and transportation tools' becoming excellent.”
What is Tourism?
• Four different perspectives of tourism can be identified:
1. The tourist: The tourist seeks various psychic and physical experience and
satisfactions. The nature of these will largely determine the destinations chosen and
the activities enjoyed.
2. The business providing tourist goods and services: Business people see tourism as an
opportunity to make a profit by supplying the goods and services that the tourist
markets demand.
3. The government of the host community or area: politicians view tourism as a wealth
factor in the economy of their jurisdiction. Their perspective is related to the income
their citizens can earn from this business. They also consider the foreign exchange
receipts from international tourism as well as the tax receipts collected from tourist
expenditures, either directly or indirectly. The government can lay an important role
in tourism policy, development, promotion and implementation.
4. The host community: Local people usually see tourism as a cultural and employment
factor. Of importance to this group, for example, is the effect of the interaction
between large numbers of international visitors and residents. This effect may be
beneficial or harmful, or both.
 • The most widely accepted definition
• Approved by United Nations Statistical Commission
in its twenty-seventh session held from 22
February to 3 March 1993

Definition of
• As Per WTO

Tourism by
WTO “Tourism comprises the activities of
persons travelling to and staying in places
outside their usual environment for not
more than one consecutive year for leisure,
business and other purposes”
Tourism Category
Inbound tourism:
Visits to a country by
nonresidents
International
tourism
Outbound tourism:
Visits by residents of
a country to another
Internal tourism: country
Visits by resident and
non residents of the
Tourism can be country of reference
divided by four
category: Domestic tourism:
Visits by residents of
a country to their
own country

National tourism:
Internal tourism plus
outbound tourism
 TRAVEL is Journeys undertaken from
one place to another for any purpose
including journeys to work and as a
part of employment, as a part of
leisure and to take up residence.

DIFFERENCE
BETWEEN Whereas, Tourism includes the journey
to a destination + stay at a destination
outside one’s usual place of residence
TRAVEL & + activities undertaken for leisure and
recreation.

TOURISM
Therefore, All tourism includes some
travel, but not all travel is tourism. A
person may often travel for a wide
variety of purposes of which tourism is
only one.
 Merriam Webster’s Dictionary
defines hospitality as, “generous
and friendly treatment of
visitors and guests or hospitable
treatment.”
Defining
Hospitality… Dictionary.com goes further to
define it as, “the friendly and
generous reception and
entertainment of guests,
visitors, or strangers.”
What is Hospitality Business?

• Also called hospitality industry or tourism industry, a broad

category of fields within the service industry that includes
lodging, restaurants, event planning, theme parks, transportation,
cruise line, and additional fields.
 Refers to activities
undertaken by a
company to promote Advertising
the buying or selling of
a product or service.

Marketing Marketing includes: Selling

defined:

delivering products to
consumers or other
businesses
Tourism and Hospitality
Marketing and its
uniqueness
 Marketing is the process for getting a
company's product or service out to
consumers.

Tourism and Hospitality marketing is how

segments of the tourism industry such as
transportation, hotels, restaurants, resorts,
amusement parks and other entertainment
and accommodations businesses promote
their products or services.
The following summarizes the three main components of
the marketing concept that we have addressed above:

Customers’ needs/ wants/ demands – the focus of the marketing

concept is to satisfy customers’ needs, wants, and demands;

Profitability – companies aim to generate profits by satisfying their

customers’ demands better than their competitors;

Integrated marketing – marketing is a concerted effort from all

personnel within a company.
Tourism and Hospitality are service industry.

Unlike consumer products which can be availed off the shelf,

tourism and hospitality products have unique characteristics
that make their marketing and promotions quite challenging.
 INTANGIBLE
INSEPERABLE
PERISHABLE
HIGH UNSTABLE DEMAND
VARIABLE
MOTIVATIONS
UNIQUE DOMINANT ROLE OF INTERMEDIATES
CHARACTERISTICS
BRAND MARKETING
EMOTIONAL MARKETING
AFFINITY MARKETING
NO OWNERSHIP
SEASONAL
SUBSTITUTABLE
INTANGIBLE

Services cannot be seen, tasted, felt, heard, or smelled before

they are purchased.

In the tourism and hospitality industry many of the product sold,

are only experiences.
INSEPERABLE

In tourism and hospitality services, both the service provider and the
customer must be present for the transaction to occur.

Service inseparability also means that customers are the part of a

product.

Product cannot be delivered to where the consumer is. Most of the

time it is the consumer who goes to where the product is to avail
it.

Another implication is that customers and employees must

understand the service delivery system because they are
coproducing the service.
 Services cannot be stored.

If a service is unused, it is wasted.

PERISHABLE

Example: if a hotel of 100 rooms

does not gets reservation for 40
rooms, the 40 rooms cannot be
stored away.
HIGH UNSTABLE DEMAND

In tourism and hospitality industry, the Seasonal changes greatly affect the demand
demand is influenced by factors such as of products.
economic , political, natural disasters etc.
 The quality of services
Services are highly variable. depends when, where and
by whom are they provided.

VARIABLE
The simultaneous
production and consumption
of services makes it difficult
to maintain their
consistency, specially during
peak periods.
MOTIVATIONS

Motivation here refers to

the subjective and Different individuals can
objective reasons, make same or different
expectation and desires choices for entirely
which influence tourist different or mutually
choice for a certain exclusive reasons.
destination.
 Intermediates here refers to:
-tour operators
-travel agents
DOMINANT ROLE -hotel brokers

OF
INTERMEDIATES
These play a very important role as they
eventually enjoy superior marketing
strength.
 Brands are
defined as
unique
elements that
identify a
product and
set it apart
BRAND from others.

MARKETING • Memorability
• Loyalty
• Familiarity
Advantages: • Premium image, premium price
• Greater company equity
• Lower marketing expenses
• For consumers, less risk
 • The use of words, signs, and/or
symbols aimed at soliciting some set
EMOTIONAL of emotions, such as:
MARKETING • Joy
• Excitement
• relaxation from a target audience
 Marketing programs sponsored by
organizations that solicit
“involvement” by individuals who
share a common interest and/or
activity

AFFINITY Seeks to get consumers to buy

and use a particular product
MARKETING based upon a shared activity
or interest

I.e., credit card companies

NO OWNERSHIP

• Tourism attractions have no ownership, as well as no ownership

passes from seller to buyer in tourism industry. The buyer only
acquires the right to certain benefits for specific time period of
what the seller offers.
SEASONAL

Seasonality does not only refer to seasons of the year or the

weather conditions. It also refers to behavioral patterns of the
travel market.

The seasonality of the tourism product hinder it from maximizing

its profits all year round, hence intensified marketing during the
lean season will help increase demand for the product.

This also the reason most tourism products have different rates
throughout the year.
 Competition in the tourism and hospitality
industry is intensifying. With new destinations
emerging and competing in the global
marketplace, one destination can easily be
substituted for another destination.

It quite a challenge to establish loyalty among

SUBSTITUTABLE clients since there is a wide range of product
offerings to choose from.

However, identifying one’s competitive

advantage and a unique selling proposition may
help make a tourism product less substitutable.
Marketing
necessarily plays an
important role in the
purchase of tourism
and hospitality
products.
Marketing strategy
needs to developed
to make the product
competitive in a
highly
commercialized
market place
 Place (location)

Distribution (making the product readily available)

Marketing is Pricing (the cost and profit margins)

also about: Product image (how the product is perceived)

Promotion (communication to the market via

advertising, public relations, and sales promotion)

Relationship marketing
 Decision making in the purchase of tourism products
is considered to be of high involvement. Tourism
products of high involvement mean that there is a
greater degree of thought or study involved prior to
the purchase. Expensive, complex, and unrepeatable
Tourism as a are characteristics of high involvement products.
High
Involvement Purchase of expensive products is likely to go
Product through a long and detailed process of canvassing
and comparing of brands, suppliers, and products
features. If the product commands a high price
worth more than one’s monthly salary, one would
surely make detailed comparisons before finalizing,
any purchase. Travel products, home appliances, and
real estate properties fall under this attribute.
 Consumers may find complex products difficult to
purchase. The difficulty may arise from the need to
understand the features or details of the product.
Travel packages can be considered as complex
mainly due to the variety of products and services
available, and the “jargons” used in explaining some
of these products. The same holds true for highly
Tourism as a technical products such as electronic gadgets and
computers.
High
Involvement The unrepeatable nature of travel makes it a “once-
Product in-a-lifetime” purchase. With the novelty seeking
behavior of most tourists and the high cost of travel,
travel purchases may not be repeated or may be
infrequent. Hence, more careful scrutiny is
exercised prior to purchase. Aside from travel
products, special events such as weddings and
debuts fall under this characteristics.
 Unlike low involvement products which are
inexpensive, simple, and familiar, more detailed
scrutiny of alternatives, longer time for
deliberation, and high expectations for
satisfaction happen when consumers avail of
Tourism as a tourism products and services that are of high
involvement.
High
Involvement Marketing plays a vital role in the purchase of high
Product involvement products. It leads consumers to think
about the product and its features as well as to
assure them of its quality. It helps clarify doubts
and lessen risks involved in the purchase of the
products. Since tourism products and services are
high involvement products, consumers also
demand a high level of satisfaction.
HIGH INVOLVEMENT VS. LOW INVOLVEMENT PRODUCTS

HIGH INVOLVEMENT LOW INVOLVEMENT

Expensive Inexpensive

Complex Simple

Unrepeatable Familiar
 Marketing Information System

Marketing Planning

MARKETING AS
A MANAGEMENT Planning Tactical Campaigns

PROCESS
Marketing Operations

Monitoring and Control

Marketing Information System

• With the advent of technology, the provision

for a marketing information system enables
the organization to compile an updated set of
information about its customers, competitors,
and the organization’s capability and
effectiveness.
 This involves an analysis of the marketing
environment in relation to the potentials
of one’s business.

It also involves the setting up of

Marketing objectives and an evaluation of the
milestones that the company has
Planning reached.

The creation of marketing strategies will

help increase the business by obtaining
the best fit between the company’s
resources and its target market position.
 • This step ensures that practical and
Planning realistic tactical campaigns are conducted
Tactical in support of the comprehensive
marketing strategy.
Campaigns
 • This process involves the
challenging part of implementing
the planned strategic and tactical
Marketing campaigns by coordinating with all
Operations stakeholders, fine tuning the
marketing mix as they unfold, and
ensuring that activities are
conducted as planned.
 This involves the ongoing process of
evaluating sales data and financial
performance versus marketing activities
conducted.

It also includes the handling of customer

Monitoring and feedback and complaints (if any) and
Control coordination with what the staff has to
say about the marketing campaigns.

Finally, it includes being aware of what

the competitors are doing.
 1. Marketing Information
CORE Management
MARKETING 2. Financing
FUNCTIONS 3. Pricing
4. Promotion
5. Product/Service
Management
6. Distribution
7. Selling
Marketing
Information • Entails gathering
information about
Management customers to better
serve their needs
and improve
decision making.
 • Involves planning to
Financing ensure that
resources are
available to
maintain and
improve the
business.
 • Ensures that the
Pricing value and cost of
goods and services
offered to customers
will be at the level
that customers are
willing to pay.
 • Prepares the various
Promotion promotional
strategies that will
enable the products
to be introduced
and sold to the
customers.
Product/Service • Involves designing,
developing,
Management maintaining,
improving, and
acquiring products
and services to meet
the needs of the
customers.
Distribution • Involves bringing the
products and
services to the
customers in the
best way possible.
 • Is the ultimate
measure of
Selling marketing success.
Strategies on
following up the
sale, closing the
sale, and making a
repeat sale are
crucial tasks of
marketing.
 Tourism marketing is
different because the
customer purchases a
series of services. While
marketing a tourism
product, the sales or
marketing person insists
on the positive facets of
the four components:

Reference:https://www.tutorialspoint.com/tourism_management/tourism_management_marketing_mix
 The tourism being a service sold to the
customers, tourist experience is the
product, which is intangible, and non-
storable.

The quality of the tourist experience as a

product is directly proportional to the
Product quality of the service a tourism business
provides.

The product must be designed to highlight

its features and to satisfy the tourist’s
needs. If the product is branded, the
customers find it more reliable.
Price
• Determining the price of the product
requires consideration of three key
factors:
1. Operating costs
2. Profit Margins
3. Commissions of Intermediaries
 1. Operating costs − Operating costs include
both fixed and variable costs.
• Fixed costs remain same regardless of
the sales which involve building,
Price insurance, and equipment costs.
• Variable costs include costs for wages,
gas, electricity, cleaning, maintenance,
repairing, materials used in production,
office stationery, linen, food, petrol,
machinery, uniforms, bank fees,
marketing research expenses, and
expenses for advertisements,
promotions, brochures, and conducting
consumer or trade events.
 2. Profit Margins − This is determined by
comparing the competitors’ offers and
Price the own product offers. Profit margins
are set without compromising the
competitive advantage.
3. Commissions of Intermediaries −
Working with intermediaries incurs
commissions. Commissions are the fees
paid to the intermediaries to distribute
and sell your product.
 Commonly followed pricing policies
include:
Discount Pricing − This strategy calls for
reductions to a basic Price of product or
services. It is a form of sales promotion which at
times proves to be rewarding for the customers.
Tourism Variable Pricing − pricing varies with respect to
Product Pricing the variation in features of a product.
Loss Leader Pricing − It is selling few products
Policies at prices lower than the actual prices. It helps
to settle the loss by attracting customers to buy
more number of products.
Promotional Pricing − It is selling a product for
free with another product with the objective of
promoting the free product. Customer interest is
generated to use the free product thereby
increasing the sale.
 The place is where the tourists visit and stay.

The potential of a tourist destination lies in its

Place attractiveness or aesthetic value, accessibility,
and the facilities it provides to the tourists.

The tourists also seek a place highly for the

activities it offers, the amenities and skilled
workforce it provides, and its location.
 Promotion is intended to inform the customers
about the products, create an image about
the product, and position the products in the
market. There are various effective ways of
promoting the tourism products:
Advertising the products on television commercials,
newspapers, radio stations, and websites.
Distributing promotional material such as diaries,
brochures, keychains, wallets, purses, water bottles,
Promotion pens, or any small gift item designed for promoting
the product.
Setting Point of Sale (POS) displays at various places
such as retail stores, shops, malls, or petrol pumps.
Promoting tourism products in local fairs.
Promoting the products with their attractive features
on the website of the tourism enterprise.
Conducting programs of sponsorships, or promoting
products by offering them as incentives.
Integrated
Marketing • It is the process of using
Communications all forms of promotion
(IMC) to achieve maximum
communication impact
while maintaining a
consistent image for the
products or services.
 During the 1980s, many
companies came to see the
need for more of a strategic
integration of their
promotional tools

To coordinate the use of a

Evolution of variety of promotional tools
IMC rather than relying primarily
on media advertising

IMC offers one-stop shopping

for all their clients’
promotional needs
 Better synergy among various
promotional functions.

Companies can avoid duplication.

Relevance of To maximize the return on its

investment in marketing and promotion
IMC
Changes in the Target Group
(Customers)

New Technological Advancements

Factors responsible for Rapid
Growth of IMC
• Allocation of funds from media advertising to other
forms of promotion, particularly consumer- and trade-
oriented sales promotions.
• A shift from traditional ways of relying on advertising-
focused approaches.
• A shift in marketplace power from manufacturers to
retailers.
• The rapid growth and development of database
marketing.
• Demands for greater accountability from advertising
agencies and changes in the way agencies are
compensated.
• The phenomenal rise of the Internet.